9/29/21, 8:54 PM [ G.R. No.

183852, October 20, 2010 ]

648 Phil. 560

SECOND DIVISION
[ G.R. No. 183852, October 20, 2010 ]
CARMELA BROBIO MANGAHAS, PETITIONER, VS. EUFROCINA A.
BROBIO, RESPONDENT.

RESOLUTION

NACHURA, J.:

This petition for review on certiorari seeks to set aside the Court of Appeals (CA) Decision[1]
dated February 21, 2008, which dismissed petitioner's action to enforce payment of a
promissory note issued by respondent, and Resolution[2] dated July 9, 2008, which denied
petitioner's motion for reconsideration.

The case arose from the following facts:

On January 10, 2002, Pacifico S. Brobio  (Pacifico) died intestate, leaving three parcels of land.
He was survived by his wife, respondent Eufrocina A. Brobio, and four legitimate and three
illegitimate children; petitioner Carmela Brobio Mangahas is one of the illegitimate children.

On May 12, 2002, the heirs of the deceased executed a Deed of Extrajudicial Settlement of
Estate of the Late Pacifico Brobio with Waiver.  In the Deed, petitioner and Pacifico's other
children, in consideration of their love and affection for respondent and the sum of P150,000.00,
waived and ceded their respective shares over the three parcels of land in favor of respondent.
According to petitioner, respondent promised to give her an additional amount for her share in
her father's estate. Thus, after the signing of the Deed, petitioner demanded from respondent the
promised additional amount, but respondent refused to pay, claiming that she had no more
money.[3]

A year later, while processing her tax obligations with the Bureau of Internal Revenue (BIR),
respondent was required to submit an original copy of the Deed. Left with no more original
copy of the Deed, respondent summoned petitioner to her office on May 31, 2003 and asked her
to countersign a copy of the Deed. Petitioner refused to countersign the document, demanding
that respondent first give her the additional amount that she promised.  Considering the value of
the three parcels of land (which she claimed to be worth P20M), petitioner asked for P1M, but
respondent begged her to lower the amount. Petitioner agreed to lower it to P600,000.00. 
Because respondent did not have the money at that time and petitioner refused to countersign
the Deed without any assurance that the amount would be paid, respondent executed a
promissory note. Petitioner agreed to sign the Deed when respondent signed the promissory
note which read --

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31 May 2003

This is to promise that I will give a Financial Assistance to CARMELA B.

MANGAHAS the amount of P600,000.00 Six Hundred Thousand only on June 15,
2003.

(SGD)
EUFROCINA A.
BROBIO[4]

When the promissory note fell due, respondent failed and refused to pay despite demand.
Petitioner made several more demands upon respondent but the latter kept on insisting that she
had no money.

On January 28, 2004, petitioner filed a Complaint for Specific Performance with Damages[5]
against respondent, alleging in part--

2. That plaintiff and defendant are legal heirs of the deceased, Pacifico S.
Brobio[,] who died intestate and leaving without a will, on January 10, 2002,
but leaving several real and personal properties (bank deposits), and some of
which were the subject of the extra-judicial settlement among them,
compulsory heirs of the deceased, Pacifico Brobio. x x x.

3. That in consideration of the said waiver of the plaintiff over the listed
properties in the extra-judicial settlement, plaintiff received the sum of
P150,000.00, and the defendant executed a "Promissory Note" on June 15,
2003, further committing herself to give plaintiff a financial assistance in the
amount of P600,000.00. x x x.

4. That on its due date, June 15, 2003, defendant failed to make good of her
promise of delivering to the plaintiff the sum of P600,000.00 pursuant to her
"Promissory Note" dated May 31, 2003, and despite repeated demands,
defendant had maliciously and capriciously refused to deliver to the plaintiff
the amount [of] P600,000.00, and the last of which demands was on October
29, 2003. x x x.[6]

In her Answer with Compulsory Counterclaim,[7] respondent admitted that she signed the
promissory note but claimed that she was forced to do so. She also claimed that the undertaking
was not supported by any  consideration. More specifically, she contended that --

10. Defendant was practically held "hostage" by the demand of the plaintiff. At that
time, defendant was so much pressured and was in [a] hurry to submit the documents
to the Bureau of Internal Revenue because of the deadline set and for fear of possible
penalty if not complied with. Defendant pleaded understanding but plaintiff was
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adamant. Her hand could only move in exchange for 1 million pesos.

11. Defendant, out of pressure and confused disposition, was constrained to make a
promissory note in a reduced amount in favor of the plaintiff. The circumstances in
the execution of the promissory note were obviously attended by involuntariness and
the same was issued without consideration at all or for illegal consideration.[8]

On May 15, 2006, the Regional Trial Court (RTC) rendered a decision in favor of petitioner.
The RTC found that the alleged "pressure and confused disposition" experienced by respondent
and the circumstances that led to the execution of the promissory note do not constitute undue
influence as would vitiate respondent's consent thereto. On the contrary, the RTC observed that -
-

It is clear from all the foregoing that it is the defendant who took improper
advantage of the plaintiff's trust and confidence in her by resorting to a worthless
written promise, which she was intent on reneging. On the other hand, plaintiff did
not perform an unlawful conduct when she insisted on a written commitment from
the defendant, as embodied in the promissory note in question, before affixing her
signature that was asked of her by the defendant because, as already mentioned, that
was the only opportunity available to her or which suddenly and unexpectedly
presented itself to her in order to press her demand upon the defendant to satisfy the
correct amount of consideration due to her. In other words, as the defendant had
repeatedly rebuffed her plea for additional consideration by claiming lack of money,
it is only natural for the plaintiff to seize the unexpected opportunity that suddenly
presented itself in order to compel the defendant to give to her [what is] due [her].
And by executing the promissory note which the defendant had no intention of
honoring, as testified to by her, the defendant clearly acted in bad faith and took
advantage of the trust and confidence that plaintiff had reposed in her.[9]

The RTC also brushed aside respondent's claim that the promissory note was not supported by
valuable consideration. The court maintained that the promissory note was an additional
consideration for the waiver of petitioner's share in the three properties in favor of respondent.
Its conclusion was bolstered by the fact that the promissory note was executed after negotiation
and haggling between the parties. The dispositive portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered as follows:

1. Ordering the defendant to pay to plaintiff the sum of Six Hundred Thousand
Pesos (P600,000.00) which she committed to pay to plaintiff under the
promissory note in question, plus interest thereon at the rate of 12% per annum
computed from the date of the filing of the complaint;

2. Ordering the defendant to pay to plaintiff the sum of P50,000.00 as attorney's

fees; and
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3. Ordering the defendant to pay to plaintiff the costs of this suit.

SO ORDERED.[10]

On February 21, 2008, the CA reversed the RTC decision and dismissed the complaint.[11] The
CA found that there was a complete absence of consideration in the execution of the promissory
note, which made it  inexistent and without any legal force and effect. The court noted that
"financial assistance" was not the real reason why respondent executed the promissory note, but
only to secure petitioner's signature. The CA held that the waiver of petitioner's share in the
three properties, as expressed in the deed of extrajudicial settlement, may not be considered as
the consideration of the promissory note, considering that petitioner signed the Deed way back
in 2002 and she had already received the consideration of P150,000.00 for signing the same.
The CA went on to hold that if petitioner disagreed with the amount she received, then she
should have filed an action for partition.

Further, the CA found that intimidation attended the signing of the promissory note. Respondent
needed the Deed countersigned by petitioner in order to comply with a BIR requirement; and,
with petitioner's refusal to sign the said document, respondent was forced to sign the promissory
note to assure petitioner that the money promised to her would be paid.

Petitioner moved for the reconsideration of the CA Decision. In a Resolution dated July 9, 2008,
the CA denied petitioner's motion.[12]

In this petition for review, petitioner raises the following issues:

1. The Honorable Court of Appeals erred in the appreciation of the facts of this
case when it found that intimidation attended the execution of the promissory
note subject of this case.

2. The Honorable Court of Appeals erred when it found that the promissory note
was without consideration.

3. The Honorable Court of Appeals erred when it stated that petitioner should
have filed [an action] for partition instead of a case for specific performance.
[13]

The petition is meritorious.

Contracts are voidable where consent thereto is given through mistake, violence, intimidation,
undue influence, or fraud. In determining whether consent is vitiated by any of these
circumstances, courts are given a wide latitude in weighing the facts or circumstances in a given
case and in deciding in favor of what they believe actually occurred, considering the age,
physical infirmity, intelligence, relationship, and conduct of the parties at the time of the
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execution of the contract and subsequent thereto, irrespective of whether the contract is in a
public or private writing.[14]

Nowhere is it alleged that mistake, violence, fraud, or intimidation attended the execution of the
promissory note.  Still, respondent insists that she was "forced" into signing the promissory note
because petitioner would not sign the document required by the BIR.  In one case, the Court - in
characterizing a similar argument by respondents therein - held that such allegation is
tantamount to saying that the other party exerted undue influence upon them.  However, the
Court said that the fact that respondents were "forced" to sign the documents does not amount to
vitiated consent.[15]

There is undue influence when a person takes improper advantage of his power over the will of
another, depriving the latter of a reasonable freedom of choice.[16] For undue influence to be
present, the influence exerted must have so overpowered or subjugated the mind of a
contracting party as to destroy his free agency, making him express the will of another rather
than his own.[17]

Respondent may have desperately needed petitioner's signature on the Deed, but there is no
showing that she was deprived of free agency when she signed the promissory note. Being
forced into a situation does not amount to vitiated consent where it is not shown that the party is
deprived of free will and choice. Respondent still had a choice: she could have refused to
execute the promissory note and resorted to judicial means to obtain petitioner's signature. 
Instead, respondent chose to execute the promissory note to obtain petitioner's signature,
thereby agreeing to pay the amount demanded by petitioner.

The fact that respondent may have felt compelled, under the circumstances, to execute the
promissory note will not negate the voluntariness of the act. As rightly observed by the trial
court, the execution of the promissory note in the amount of P600,000.00 was, in fact, the
product of a negotiation between the parties. Respondent herself testified that she bargained
with petitioner to lower the amount:

ATTY. VILLEGAS:

Q And is it not that there was even a bargaining from P1-M to P600,000.00
before you prepare[d] and [sign[ed] that promissory note marked as Exhibit
"C"?
A Yes, sir.

Q And in fact, you were the one [who] personally wrote the amount of
P600,000.00 only as indicated in the said promissory note?
A Yes, sir.

COURT:

Q So, just to clarify. Carmela was asking an additional amount of P1-M for her
to sign this document but you negotiated with her and asked that it be

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lowered to P600,000.00 to which she agreed, is that correct?

A Yes, Your Honor. Napilitan na po ako.

Q But you negotiated and asked for its reduction from P1-M to P600,000.00?
A Yes, Your Honor.[18]

Contrary to the CA's findings, the situation did not amount to intimidation that vitiated consent.
There is intimidation when one of the contracting parties is compelled to give his consent by a
reasonable and well-grounded fear of an imminent and grave evil upon his person or property,
or upon the person or property of his spouse, descendants, or ascendants.[19] Certainly, the
payment of penalties for delayed payment of taxes would not qualify as a "reasonable and well-
grounded fear of an imminent and grave evil."

We join the RTC in holding that courts will not set aside contracts merely because solicitation,
importunity, argument, persuasion, or appeal to affection was used to obtain the consent of the
other party. Influence obtained by persuasion or argument or by appeal to affection is not
prohibited either in law or morals and is not obnoxious even in courts of equity.[20]

On the issue that the promissory note is void for not being supported by a consideration, we
likewise disagree with the CA.

A contract is presumed to be supported by cause or consideration.[21] The presumption that a

contract has sufficient consideration cannot be overthrown by a mere assertion that it has no
consideration. To overcome the presumption, the alleged lack of consideration must be shown
by preponderance of evidence.[22] The burden to prove lack of consideration rests upon
whoever alleges it, which, in the present case, is respondent.

Respondent failed to prove that the promissory note was not supported by any consideration.
From her testimony and her assertions in the pleadings, it is clear that the promissory note was
issued for a cause or consideration, which, at the very least, was petitioner's signature on the
document.

It may very well be argued that if such was the consideration, it was inadequate. Nonetheless,
even if the consideration is inadequate, the contract would not be invalidated, unless there has
been fraud, mistake, or undue influence.[23]  As previously stated, none of these grounds had
been proven present in this case.

The foregoing discussion renders the final issue insignificant. Be that as it may, we would like
to state that the remedy suggested by the CA is not the proper one under the circumstances. An
action for partition implies that the property is still owned in common.[24]  Considering that the
heirs had already executed a deed of extrajudicial settlement and waived their shares in favor of
respondent, the properties are no longer under a state of co-ownership; there is nothing more to
be partitioned, as ownership had already been merged in one person.

WHEREFORE, premises considered, the CA Decision dated February 21, 2008 and its
Resolution dated July 9, 2008 are REVERSED and SET ASIDE. The RTC decision dated May
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15, 2006 is REINSTATED.

SO ORDERED.

Corona, C.J.,* Carpio, (Chairperson), Leonardo-De Castro,** and Mendoza, JJ., concur.

*Additional member in lieu of Associate Justice Diosdado M. Peralta per Raffle dated May 27,
2009.

** Additional member in lieu of Associate Justice Roberto A. Abad per Special Order No. 905
dated October 5, 2010.

[1]Penned by Associate Justice Normandie B. Pizarro, with Associate Justices Edgardo P. Cruz
and Fernanda Lampas Peralta, concurring; rollo, 30-42.

[2] Id. at 43-44.

[3] TSN, August 17, 2005, pp. 4-5.

[4] The promissory note is a non-negotiable instrument as it does not conform to the
requirements under Sec. 1 of the Negotiable Instruments Law; records, p. 57.

[5] Id. at 5-6.

[6] Id.

[7] Id. at 25-29.

[8] Id. at 26-27.

[9] Id. at 102-103.

[10] Id. at 104.

[11] Rollo, p. 41.

[12] Id. at 44.

[13] Id. at 17-18.

[14] Leonardo v. Court of Appeals, 481 Phil. 520, 532 (2004).

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[15] Development
Bank of the Philippines v. Court of Appeals, G.R. No. 138703, June 30, 2006,
494 SCRA 25, 42-43.

[16] Civil Code of the Philippines, Art. 1337.

[17] Carpo v. Chua, G.R. Nos. 150773 and 153599, September 30, 2005, 471 SCRA 471, 482.

[18] TSN, August 17, 2005, p. 11.

[19] Civil Code of the Philippines, Art. 1335.

[20] Martinez v. Hongkong & Shanghai Bank, 15 Phil. 252, 270 (1910).

[21] Civil Code of the Philippines, Art. 1354.

[22] Saguid v. Security Finance, Inc., G.R. No.159467, December 9, 2005, 477 SCRA 256, 270-
271.

[23] Civil Code of the Philippines, Art. 1355.

[24] Republic  v. Baltazar-Ramirez, G.R. No.148103, July 27, 2006, 496 SCRA 718, 721.

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